051907: Stocks reach new all-time high

May 19, 2007
Updated 03:09:11 (Mla time)
Elizabeth Sanchez-Lacson
Inquirer

MANILA, Philippines -- The Philippines' main share index Friday reached its highest level in the 80 years of the stock market, buoyed by heavy foreign buying, good economic indicators and increased corporate earnings, dealers said.

The Philippine Stock Exchange (PSE) index closed at 3,449.18 points, its highest finish since stock market trading began in the Philippines in 1927. The previous all-time high was 3,447.60, set on Feb. 3, 1997, shortly before the 1997-98 Asian economic crisis affected the Philippines.

At the spot currency market, the peso rallied to 46.60 to the dollar Friday, a new six-year high, after the central bank, Bangko Sentral ng Pilipinas (BSP) said Thursday that foreign portfolio investments in April rose 40 percent from a month earlier to $243.1 million.

Traders said heavy foreign buying of Philippine stocks was spurred by an investor roadshow in Manila early this week by global financial services giant JP Morgan for foreign fund managers.

"The JP Morgan conference boosted confidence and possibly translated into orders. The buying was coming from JP Morgan," said Joseph Roxas, president of Eagle Equities Inc.

Total foreign buying reached P2.75 billion Friday as against total foreign selling of P1.676 billion, for net foreign buying of roughly P1.07 billion.

"Market sentiment was buoyed by good economic indicators and corporate results. Also, election-related concerns are out of the way," said Gomer Tan of Regina Capital Development Corp.

In Malacañang, President Gloria Macapagal-Arroyo said in a statement: "The vibrancy of Philippine democracy is matched by the exuberance of our stock market. We are edified by the confidence shown by our financial market and investors in our ability to surmount the myriad challenges that usually exist in any election. Our journey to peace, stability and progress is unimpeded."

PSE president Francis Lim said, "A confluence of favorable developments helped the PSE set a new record and I am confident that the same factors will support our market as it blazes new stock market trails. The positive development includes improvement in government's fiscal position, falling interest and inflation rates and higher corporate earnings."

Lim said the market's record-breaking performance came on the heels of the relatively peaceful elections held last May 14.

"I believe that the market surge represents our own peace dividend from the elections which the market views to be relatively peaceful," he said.

"All this helped elevate level of confidence of investors in the market and explained why more and more investors are investing their money in our markets thereby increasing value turnover," he added.

As investors ignored Wall Street's retreat and focused on the domestic economy, the main index rose by 31.49 points or 0.92 percent from Thursday's close.

The main index traded between 3,457.93 and 3,419.40. It was the third straight session that the key index posted a record intraday high.

The broader all-share index jumped 17.88 points to 2,200.25.

There were 62 gainers and 40 losers, and 57 issues closed unchanged.

A total of 3.1 billion shares worth P9.7 billion were traded, including a cross sale of San Miguel Corp. Class B shares worth P4.82 billion.

For the week, the composite index ended higher than a week earlier by 84.57 points, or 2.51 percent, at 3,449.18. Average daily turnover rose to 3.69 billion shares, worth P6.33 billion, from 3.52 billion shares worth P4.32 billion last week.

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